Following a boom in cryptocurrency trading in Southeast Asia’s second-largest economy, Thailand’s cabinet, Khana Ratthamontri, has simplified tax laws for investments in digital assets like as cryptocurrencies and digital tokens in order to promote and expand the industry.
Thailand’s Taxation on Digital Assets
According to Finance Minister Arkhom Termpittayapaisith, the laws would allow traders to credit annual losses against gains for taxes due on cryptocurrency investments, and will exempt cryptocurrency trading on recognized exchanges from a 7% value-added tax.
The tax break will last from April 2022 to December 2023. According to him, it will also cover the trading of retail central bank digital money to be issued by the central bank.
Following criticism from the cryptocurrency community, Thailand has announced the cancellation of its planned 15% withholding tax on cryptocurrencies.
Thailand’s digital assets have risen rapidly in the last year, with trade accounts jumping to almost 2 million at the end of 2021 from around 170,000 earlier that year, according to a ministry official in January 2022.
Bitcoin (BTC) is Thailand’s most popular cryptocurrency.
According to Arkhom, the cabinet also authorized tax benefits for direct and indirect investments in startups. Investors who invest in startups for at least two years will be eligible for a 10-year tax holiday until June 2032.
Thailand’s Taxation on Digital Assets Guidelines
Several years after the government incorporated measures to tax digital assets in the Revenue Code, the Thai Revenue Department defined how cryptocurrencies and digital tokens (digital assets) will be taxed in February.
The tax authorities announced that earnings from trading digital assets will only be taxed if the selling price of a digital asset exceeds its acquisition cost, citing the difficulties of identifying the proper tax to be levied on digital asset transactions conducted through regulated exchanges.
The tax authorities also issued guidance on how to tax cryptocurrency mining, digital assets received as salaries/wages or gifts, and income from holding digital assets as investments.